Why do money transfers between bank accounts take many days?
In: Other
For transactions involving different currencies across boarders :-
(1) – If the Bank where your account is held is a local branch, they will pass on the request to the international head office. If you’re using an on-line method, it still gets passed on electronically to the international head office.
(2) – The Bank making the transfer must purchase the the currency you are transferring into, if they do not posess that currency in reserve. They do so via their international FOREX traders and depending on the type of client you are to them (business or personal account or high net worth) they may put your request at the back of a priority list.
(3) – Once the transaction is processed, the international branch of the receiving Bank gets the notification and it is up to that Bank to then notify the branch where the receiving account resides. This doesn’t happen immediately and can take one business day. Finally, the receiving branch may not credit / release the funds until close of business on the day of receipt. Depending on the amount transferred (over $10,000 USD), the bank may be required by policy or in some countries, law, to hold the funds for 5 business days to facilitate due diligence ( money laundering checks, etc. )
For transfer in the same currency and within the same country and under $10,000 USD, one business day should be the norm however the banks often advise that it could take up to three, just in the event that they need to perform checks. For large amounts, I was also informed that the branches should be notified in advance (not sure why seeing that no physical currency needs to be deposited on site however that can add a day to the time it takes if they aren’t notified before).
It seems that at the end of the day, the delay is down to the Bank’s due diligence policies and not a limitation of computerization.
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